The purpose of this thesis is to analyse the major perspectives on the social and economic situation of "blacks" in Britain and the U. S. A. As part of this, alternative concepts are suggested which we feel are of greater theoretical depth and relevance than race relations theory. By race relations theory we mean any text which implicitly or explicitly does not treat "race relations" as a concept. That is to say, one which attempts to explain race relations rather than investigate it epistemologically. The race relations perspective justifies itself with reference to the actors' definition of the situation, namely, race consciousness, racism and racial discrimination. We hope to demonstrate that its epistemological and methodological basis generates a formidable theoretical incoherence and unavoidable inconsistencies. Our method is to take the theory at its word and confront its conclusions and propositions with its methodological principles. We then extract the inadequacies and trace them to epistemological assumptions. This procedure is accompanied by a suggested resolution of the problems identified by race relations theory, namely, that to explain the social and economic situation of "blacks" it is necessary to analyse the class structure of capitalist society. In other words, the most theoretically consistent approach would be that whose point of departure is capitalist relations of production. Such an explanation, however, must be prefaced by the analysis of race relations as a concept, i.e. as a term within a specific epistemological and theoretical tradition. This development displaces "race relations" as a theory and paves the way for the posing of different questions about modes of labour exploitation, and capitalist production. Thus the last two chapters are concerned with the explanation of the conditions of existence of social segregation and changes in the processes of labour exploitation via an investigation of the relations of production within the capitalist mode of production.